Two More ETFs Exempted from Investor Review Restrictions

EIPs, like ordinary shares and REIT units, do not require retail investors to undergo an account review by their financial intermediaries before investing in such products.

This brings the total number of SGX-listed EIP ETFs to four.

All four can be traded in Singapore dollars and offer investors exposure to the benchmark Straits Times Index, two regional stock indices and government bonds.

The Monetary Authority of Singapore (MAS) in early 2012 introduced new rules requiring retail investors to complete Customer Assessment Reviews (CARs) with their financial intermediaries before investing in products classified as Specified Investment Products (SIPs).

MAS later allowed certain products, notably ETFs that met certain criteria, to be exempt from the SIP classification. With the addition of two such ETFs last week, Singapore Exchange (SGX) now has four funds that have been re-classified as Excluded Investment Products (EIPs) from their previous SIP tags. Like ordinary stocks and Real Estate Investment Trust (REIT) units, EIPs can be bought and sold by retail investors without needing to complete a CAR.

The four EIP ETFs offer investors exposure to the Singapore benchmark Straits Times Index (STI), two regional stock indices and government bonds. The Nikko AM Singapore STI ETF and the ABF Singapore Bond Index, both managed by Nikko Asset Management Asia, acquired EIP status on April 30.

The CIMB FTSE ASEAN 40 ETF and CIMB S&P Ethical Asia Pacific Dividend ETF, both managed by CIMB-Principal Asset Management, were the first two ETFs to be re-classified EIPs.